DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced China bought 4.85 million bushels (132,000 mt) of U.S. soybeans for 2017-18. Grains may be in for another quiet day of trading, but at least small early gains in soybeans and wheat are giving them a chance at slightly higher prices. Thursday's weather map is fairly quiet across the Midwest with light scattered showers in Iowa.

Other Markets:

Dow Jones:	Higher
U.S. Dollar Index:	Higher
Gold:	Lower
Crude Oil:	Lower

Corn:

December corn was up a quarter-cent early, staying near Wednesday's new contract low while potential buyers have stepped back in August. Light showers are scattered around Iowa early Thursday and light to moderate amounts are expected in Minnesota, Wisconsin, Illinois, and Indiana the next seven days. The unsung hero for crop conditions in late summer has been the moderate temperatures which are expected to continue. Early Thursday, USDA said last week's export sales and shipments of corn totaled 4.0 and 28.5 million bushels respectively, a neutral combination with two weeks still remaining in 2016-17. New-crop corn sales totaled 16.7 million bushels. The 2017 corn crop will be smaller than a year ago, but is still large enough to keep prices under bearish pressure as we head toward harvest. The trend in December corn remains down. DTN's National Corn Index closed at $3.05 Wednesday, priced 37 cents below the September contract and at a new 2017 low. In outside markets, the September U.S. dollar index is up 0.12, still trading near its lowest prices in two years ahead of this week's gathering of central bankers in Jackson Hole, Wyoming.

Soybeans:

At 8 a.m. CDT, USDA announced China bought 4.85 million bushels (132,000 mt) of U.S. soybeans for 2017-18. November soybeans were up 4 1/4 cents early with support from modest gains in both soy products. The one bullish surprise on Thursday morning is that October palm oil futures closed up 1.4% overnight at another new contract high, showing no sign of concern over the loss of potential biodiesel exports from Tuesday's Commerce Department ruling against Argentina and Indonesia. The seven-day forecast is drier across the Midwest, but there are chances for light to moderate showers in parts of Iowa, Illinois, and Indiana which may offer late help to crops. Overall, soybean yields are likely to be down from a year ago, but a record crop is still possible, helped by a streak of moderate temperatures since mid-July. Early Thursday, USDA said old-crop soybean sales showed net cancellations of 14.7 million bushels while shipments totaled 25.8 million bushels, a neutral showing for the week when new-crop soybean sales of 73.8 million bushels are included. Adding in Wednesday's cancellation, total soybean sales and shipments are now 57 million bushels above USDA's export estimate for 2016-17. With another big crop on the way, November soybeans remain under bearish pressure as is typical for this time of year. Unlike corn and wheat, soybean prices continue to hold above their June low, thanks to active demand. DTN's National Soybean Index closed at $8.77 Wednesday, priced 61 cents below the November contract and holding above its lows in June.

Wheat:

December Chicago wheat was up 3 1/4 cents, another attempt at early bargain-hunting to start the day. After dropping roughly $1.60 a bushel over the past seven weeks, it is not unreasonable to expect selling pressures to finally back off -- especially this year when the U.S. and Canada are both on track for lower production. The tougher problem for winter wheat prices is finding a reason for potential buyers to believe in their potential when world ending wheat stocks are predicted at a record high amount by USDA. The seven-day forecast expects heavy rain amounts along the Texas Gulf Coast, but not much penetration inland to the southwestern Plains. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 14.2 and 18.3 million bushels respectively, a neutral-to-bullish combination which has total shipments up 14% in 2017-18 from a year ago -- well above USDA's estimated pace. With both Chicago and K.C. wheat trading near their lowest spot prices in 2017, support should be near, but it is difficult to expect more than a sideways trading range for the rest of 2017. DTN's National SRW index closed at $3.75 Wednesday, priced 28 cents below the September contract and near its lowest price in three months.

Todd Hultman can be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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